Farm bill moves to Senate

May 4, 2012

After an overnight delay and a few more adjustments, the Senate Ag Committee did vote, 16-5, to move it forward. The 900-page bill is expected to create $26.4 billion in savings over the next decade, largely by ending the current system of direct cash payments and reinvesting in new forms of crop insurance.

The last farm bill was passed in 2008, and expires at the end of September. The measure now goes to the full Senate for consideration.

Major cuts to the U.S. food stamp program are the biggest obstacle for passage of a 2012 farm bill, according to Agriculture Secretary Tom Vilsack.

The domino effect of the food stamp cuts results in farmers losing $20 billion in direct payments, according to reports.

“That’s obviously just not going to happen,” Vilsack told The Hill in an interview last week.

Vilsack said it will be a challenge finding common ground between the proposals put forward by the Senate, the president and the House.

Vilsack said House Agriculture Committees Reps. Frank Lucas, R-OK, and Collin Peterson, D- MN, “may have their work cut out for them.”

The Senate Ag Committee’s main opposition was mostly from southern states, including John Boozman of Arkansas, Saxby Chambliss of Georgia, Thad Cochran of Mississippi, and Mitch McConnell of Kentucky. Democrat Kirsten Gillibrand of New York also voted nay, citing concerns about cost, the need for more protections for small dairy farmers, and eligibility changes for the Supplemental Nutrition Assistance Program.

In spite of the bill’s significant margin in the committee, support from Senate leadership will be needed to gain access to this summer’s crowded legislative agenda for a debate.

Chairwoman Debbie Stabenow, D-MI, and ranking Republican Pat Roberts of Kansas argued that the bill is “reform” legislation because it would save at least $23 billion over a decade, end the discredited direct payments, consolidate farm and conservation programs, and tighten restrictions on federal payments.

Committee debates centered around regional concerns raised by senators from the Northern Plains and the South. Stabenow agreed to tweak the highly controversial “shallow loss” program by offering farmers a choice of national or “own-farm” benchmarks for calculating losses. The shallow loss program would provide payments for crop yield and revenue losses of 11 percent, but not more than 21 percent.

According to DTN reporters, the committee knew southerners would object once it eliminated the nearly $5 billion a year in direct payments. Cotton and rice groups argue these payments are “... an important part of their business model and more useful than crop insurance to them.”

“This is not a bill without provisions for cotton, rice and peanuts,” Stabenow emphasized. Roberts went further, suggesting that there are limits to how far the committee can go in addressing those concerns and still avoid encouraging farmers to raise crops for federal payments rather than for markets.

“At this time, it seems that the most important question is whether the leadership in either chamber will want to risk bringing such a contentious debate to the floor in this summer’s super-politicized environment,” DTN’s Washington Insider believes.

Some industry groups are pushing for finalization on a farm bill they say is “long past due.”

“The process needs to be done responsibly and judiciously but it needs to be done as soon as possible,” said Gerry Niemeyer, National Corn Growers Association president.

American Farm Bureau Federation (AFBF) President Bob Stallman said the draft holds to the core principles for “rational, acceptable farm policy,” but there is room for adjustments to improve the legislation.

Stallman delivered that message to Senate Agriculture Committee leaders in a letter following a meeting of the organization’s board of directors. In the letter, AFBF urged the committee to approve the draft “as a vehicle to move the farm bill to the Senate floor in a timely manner.” The letter said “the importance of completing a farm bill cannot be overstated.”

The letter specifically outlined AFBF’s support for several points included in the Senate farm bill, including: the decision to “stand firm on utilizing the figure of $23 billion in savings suggested to the Super Committee last fall;” the fact that the Senate bill protects and strengthens the federal crop insurance program and does not reduce funding for the program; that programs are not based on cost of production; and that it includes “a commodity title that attempts to encourage producers to follow market signals rather than make planting decisions in anticipation of government payments.”

AFBF’s letter stated that while the draft legislation addresses many of its policy priorities, the organization continues to support a single program option for the commodity title that is extended to all crops and it has concerns about the need for improved “equity across all commodities.” The letter also stated that AFBF will continue to work toward provisions in the bill for a financial safety net that includes a “catastrophic revenue loss program based on county level losses” with coverage at 80 percent of revenue levels.

“Catastrophic loss events are typically beyond any producer’s control, and are events that would endanger the financial survivability of the farm,” Stallman said. “These events, in the past, have prompted enactment of ad hoc disaster programs. Having a catastrophic plan in place would protect farmers from these situations and extend program benefits only when they are needed, rather than potentially being a supplemental source of annual income.”

Despite the push to finish it, the farm bill has a long ways to go, with lots of amendments in its path. The bill goes to the full Senate next for amendments and approval, to the House for the House Agriculture Committee markup and approval, then to the House floor. Once it is approved by the House, it’s on to the president’s desk for approval.

It is expected that the bill will see the most changes and complications in the House.

Mary Kay Thatcher of AFBF says if the bill doesn’t get worked out and through Congress in the next 30 days, it will not likely happen this year. — Traci Eatherton, WLJ Editor